Though retailer confidence across the board is currently mixed, robust footfall at out-of-town (OOT) schemes means they remain attractive for both retailers and landlords.
We expect spending on the type of goods purchased at OOT retail schemes to grow at an average of 3.6 per cent per annum over the next five years (data from Savills Spotlight: UK Retail Warehouse Report May 2017). However, the supply of units is becoming increasingly problematic, with vacancy rates approaching an all time low. With this in mind, which towns and cities offer the greatest opportunities for landlords and developers to create new OOT space in the key sectors of fashion and comparison, grocery, leisure and bulky goods?
Our analysis found that Manchester holds the top spot for fashion and comparison opportunities, requiring an additional 145,899 sq ft of OOT retail space to bring it in line with the national average for this sector of 0.7 sq ft per shopper. This is followed by Newcastle-upon-Tyne which requires 69,115 sq ft.
For the bulky goods sector, including DIY, electrical and homeware, Birmingham has the most potential for uplift in OOT space, requiring a considerable 548,306 sq ft increase on current levels to reach the sector’s national average of 1.5 sq ft per shopper. Additionally, Liverpool and Leeds could support a further 367,859 sq ft and 328,935 sq ft respectively.
Oxford has potential for the greatest increase in OOT leisure space (excluding food and beverage), with current levels falling 38,703 sq ft short of the sector’s 0.6 sq ft per shopper average. Additionally, Reading could support 34,182 sq ft more OOT leisure space, while Grays would need a further 33,034 sq ft to bring it in line with the average.
For grocery retail, Leicester is a key opportunity market, requiring an extra 172,483 sq ft to bring it in line with the sector average of 0.6 sq ft per shopper. This is closely followed by Nottingham and Sheffield, which could support an additional 167,178 sq ft and 132,723 sq ft respectively.
Top UK locations with potential for uplift in fashion, bulky goods, leisure and grocery out of town retail space